Will TurboTax be able to handle 1 2020 1099-R which includes 1 COVID withdrawal and 1 non COVID withdrawal once the 8915-E form is configured?

[danhilde]

Note that I turned 60 years of age prior to making both 2020 401k withdrawals.  

Should I need to enter two 1099-R transactions or one (i.e. will TurboTax handle the difference between the two withdrawals when I 'upload' the one Vanguard 1099-R?).

[SamS1]

Delete the 1 1099R and split into 2 1099R transactions.  Enter them manually.  Make sure when you are done all the boxes totaled equal the amounts in the original 1099R.  The 8915-E will be used for penalty relief from early retirement plan distributions and include the option to spread the distribution income over 3 years.  This may be a good option if the distribution is pushing you into a higher marginal tax bracket.  You may end up paying less tax if you spread the distribution over the 3 years.   After you have logged in and are in your return in TurboTax Online:

• Go to Search at the top of the screen.
• then enter Form 1099-R in the search box. 
• You will see a Jump To function that will take you to the 1099-R input screens. 
• There delete the 1099R in question by clicking on the trash can next to the form
• Then add a new 1099R and manually enter your 1099R.

At the financial services screens, click "Change how I enter my form" then "Type it myself"

Make sure and check the Covid distribution box in Uncommon Situations.

[danhilde]

Thank you very much for this guidance.  I do understand what to do and do understand the importance that the (box by box) numbers in the two, manually entered, 1099R 'transactions' must equal the (box by box) totals in the original 1099R which is reported to the IRS.

Regards,

Dan Hildebrand, Phoenix Arizona

[DawnC]

All COVID-19-related distributions must be treated consistently, either all reported fully in the tax year withdrawn or all reported ratably over three years.    So, yes, it is important to keep the covid related distributions separate from the non-covid related distributions on your tax return.  

[danhilde]

SamS1 ... I just created the two 1099R transactions and everything went smoothly.  Just a note for you though.  Based on one of the questions that TurboTax asked me ... I'm thinking that TurboTax logic *does* let you enter/upload one 1099R because at one point, I was asked whether the entire withdrawal was COVID related.  I probably won't delete what I did to try this but ... I believe that if I had said 'No' to that question, I could have entered just the part that was COVID related and TurboTax would have handled that for me.  Anyway, just something to think about in case you have to look at it again.  Who knows ... I'm worn out at the moment but I may just delete the two 1099R transactions that I entered manually and try it with the single 1099R upload to see whether TurboTax can handle it.  Dan

[DaveF1006]

Yes, I would upload the 1099-R that relates to the COVID distribution and answer all questions pertaining to it. Once that is finished, you can add the second 1099-R. Let us know if this works.